Armonk Realtor | Housing starts increase by 15%

The U.S. Census Bureau and the Department of Housing and Urban Development reports privately owned housing starts increased 15% since August from an annual rate of 758,000 to 872,000 homes.

That is 34.8% above last year’s rate of 647,000. The single-family housing starts in September climbed 11% at a rate of 603,000 from August where it was at 543,000. The September rate for units in buildings with five units or more was 206,000.

Authorized building permits for privately owned housing grew 11.6% in September at annual rate of 894,000 from August’s annual rate of 801,000, and is a 45.1% increase from last year.

Single-family authorizations in September grew 6.7% in September at a rate of 545,000 from August’s rate of 511,000. Authorizations of units in building with five or more were at a rate of 323,00 in September.

The 15% increase in housing starts is a great thing, because this means that the household formation rates have grown. In 2011, they doubled for a positive housing demand, which means consumers are purchasing more property rather than renting.

Existing home and new home sales are also increasing at a 10% year-over-year rate, which mean demand is significantly higher, and mortgage rates are at an all time low. Since consumers are purchasing properties more now, the existing home inventory is down 20% year-over-year and at six months supply, which is back to normal for a good, healthy market.

Specifically, new home construction will make a fill comeback once the job market rebounds. With these current trends that we are seeing now, analysts expect a slow, but positive improvement in both markets.